Facebook Debuts User Generated Ad Option

Facebook has launched “Sponsored Stories” ads, which let marketers utilize messages from their “likes” community for paid promotions on the site. The ads contain word-for-word Facebook user posts, while appearing in the right-hand column with other paid promotions on the website.

A bevy of launch partners have already readied campaigns involving the new ads. They include Coca Cola, Levi’s, and Anheuser Busch, as well as nonprofits like Amnesty International, UNICEF, Autism Speaks, and Women for Women.

Jim Squires, marketing products manager for the Palo Alto, CA-based social giant, told ClickZ that Sponsored Stories will be available on the site’s self-service platform in a comparable manner to other ads. They will be purchased on an impression- or per-click basis, he said.

For a brand like Starbucks, an endorsement that looks like this:

May appear in an ad unit like this:

“Essentially, the recommended approach is to use [them] in conjunction with a campaign you are already running,” Squires said. “So, you say, ‘I want to add Sponsored Stories to this.’ In that case, when a Sponsored Story is able to show, it is showing [instead of] the controlled advertiser message.”

As is the case with other Facebook.com ads, Sponsored Stories can only be targeted at users who have allowed it in their privacy settings. For instance, if users have their wall posts set to “Only Friends,” those messages could not be served in ads to anyone but their friends. “You only see a Sponsored Story if you are already eligible to see it in your newsfeed,” Squires explained.

There are four types of “stories,” from Facebook’s perspective: “Like stories” involve when users choose to “like” a brand; “page post stories” entail users’ wall posts; “app stories” include messages between app users, such as video game players; and “check-in stories” consist of posts via the geo-social platform Facebook Places.

Facebook hopes marketers will be intrigued by the potential of combining user-generated content with ad-copy-based messaging in Facebook.com campaigns. “We view this as an extension of the marketing that’s happening on the platform and a way to plan for that, while [tying] it into your holistic strategy,” Squires said. “Sponsored Stories allow you to take those endorsements and recommendations that are happening…and feature them in the right-hand column and sponsor them.”

Meanwhile, eMarketer’s recent report estimated Facebook sold $1.86 billion in ads during 2010. And Zuckerberg and Co. are not easing up on the monetization gas pedal. They have been testing a fifth ad placement after implementing a fourth ad last fall. And earlier this month, Facebook added a feature that has the potential to enrich its geo-targeting capabilities.

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GroupM predicts that global ad spend will top $547 billion next year, up from $524 billion this year. While television will still capture the biggest share of that 12-figure pie (41%), digital's share will grow from 31% to 33%.